| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Global Economy Last Updated: Feb 25, 2014 - 7:39 AM

OECD: Faster job creation unlikely to return employment rates to pre-crisis levels
By Michael Hennigan, Finfacts founder and editor
Feb 22, 2014 - 9:51 AM

Email this article
 Printer friendly page
Joe Hockey, Australian treasurer, and Angel Gurría, OECD secretary-general, at the launch of the 'Going for Growth' report, Sydney, Feb 21, 2014.

Pier Carlo Padoan, deputy secretary general and chief economist at the Organisation for Economic Cooperation and Development (OECD), who today was appointed Italian finance minister in the new government of Matteo Renzi, warned this week that "faster job creation is unlikely to be enough to bring employment rates back to pre-crisis levels, let alone to levels that would offset the impact of population ageing in advanced economies."

Padoan was commenting in the OECD’s latest Going for Growth report, which was launched in Sydney on Friday, at the start of a meeting of the finance ministers and central bankers of the G-20: a group comprising the world's 19 leading developed and emerging economies.

"The widespread deceleration in productivity since the crisis could presage the beginning of a new low-growth era," Padoan said. While the global economy’s momentum remains sluggish, heightening concerns that there has been a structural downshift in growth rates compared with pre-crisis levels, he said, "these concerns, already prevalent among advanced OECD countries for some time, now encompass emerging-market economies and are fuelled also by high unemployment and falling labour force participation in many countries."

“Signs of a broad-based recovery are becoming more tangible, but governments of advanced and emerging economies now face the risk of falling into a low-growth trap,”  Angel Gurría, OECD secretary-general, said during the launch event in Sydney.

“Australia has focused its G-20 presidency on promoting stronger economic growth and employment while making the global economy more resilient to deal with future shocks. The structural reform recommendations the OECD puts forward today offer governments practical ways to boost productivity, lift growth, create jobs and avoid the low-growth trap,” Gurría said.

The OECD said the pace of reforms appears to have slowed somewhat but remains on average well above that observed prior to the crisis in most countries. Southern Eurozone, to a lesser extent, Central European countries have continued to be particularly active reformers in areas covered by OECD policy recommendations. This should not come as a surprise insofar as a number of these countries have been under market pressures or direct financial assistance programmes.

The think-tank for 34 mainly developed countries also said considerable action has been taken in areas such as labour market regulation, collective bargaining and welfare systems, which in the past have proved particularly difficult to reform. "Reforms of pension systems and early retirement schemes, as well as of active labour market programmes, have also ranked highly on the policy agenda in many other countries facing low employment rates."

The IMF said [pdf] this week in a report for the G-20:

key emerging economies (Brazil, India, and China), which were a main engine of global growth in recent years, are experiencing slower potential growth, despite still large catch-up needs. In Brazil and India, the slowdown reflects infrastructure and regulatory bottlenecks, while in China it is due to excess capacity created by the credit and investment boom. Most members have considerable scope to improve the functioning of product markets. In surplus economies (China, Germany, Japan, and Korea), action should be mostly focused on liberalizing domestic services and other non-tradable sectors, though in Japan agriculture also needs liberalization. In deficit countries, reforms are generally needed in both tradable and non-tradable sectors. Many emerging economies also have scope to improve the business environment. Labor market reforms, especially to raise participation by women and/or older workers, are important in many members, but especially in advanced economies undergoing population aging (Germany, Japan, and Korea) or where an important fraction of the population remains underemployed."

Jack Lew, US Treasury secretary, told a business group meeting:

Emerging markets need to take steps of their own to get their fiscal house in order and put structural reforms in place . We are seeing a substantial differentiation in the marketplace between economies that have made those decisions and economies that haven’t."

Ali Babacan, deputy prime minister of Turkey, blamed developed economies’ failure to introduce structural and financial reforms before the financial crisis that had required the easing of monetary policy that was now buffeting emerging markets: “It is now time for greater policy co-ordination,” he said.

The 'Going for Growth' report says that the intensity of reform has remained highest in southern euro area countries like Greece, Italy, Portugal and Spain, which are suffering from high long-term unemployment and youth joblessness. Considerable action to reform the labour market and break down barriers to job creation and mobility has been taken, in particular in Spain in Portugal, which have begun growing again.

Meanwhile, many emerging economies have yet to launch comprehensive structural reform agendas, and should implement wider efforts to improve education, address physical and legal infrastructure bottlenecks and bring more workers into formal sector employment. Mexico stands out among emerging economies for its adoption and ongoing implementation of broad-reaching reforms in competition policy, education, energy, financial services and telecommunications.

The report says that in OECD countries which face particularly rapid population ageing, such as Japan, Korea and Germany, bringing more women into the labour market and ensuring that they are fully integrated remains a key challenge.

Ireland gets a mention for "progress on bankruptcy reform and toward creating a more competitive business environment," but we Irish know too well that glacial speed change comes in Ireland, if at all.

The politicians are still trying to agree on reform of the well-heeled legal sector, which had a Troika deadline of 2011.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Global Economy
Latest Headlines
Strong Swiss franc gloom deepens for exporters
Global investors shift focus to China; EM outflows surge to $1tn in 13 months
Global oil glut will continue into 2016
Stable growth momentum in OECD area but slowing expected in China
Prices for major food commodities in July lowest since September 2009
Global manufacturing in July weakest level in two years
US, China and UK lead top 25 target countries for foreign direct investment
Budget surpluses rare in developed countries from 1980s; Italy, France, Greece had none in 60 and 40 years
Singapore, London and Shanghai top cities for new FDI projects in 2014; Dublin in 11th place
Exchange rates shuffle as Dublin ranked 49th most expensive city; Paris at 46; Berlin at 105
Western consumer groups under pressure in China and India
Developing countries facing “structural slowdown” likely to last for years
OECD BEPS Tax Project: Amazon books UK sales in UK; Australia proposes up to 100% in penalties
Emerging Markets Index falls to 12-month low in May as manufacturing contracts
US and world economies slowing in 2015 — OECD
Global manufacturing production rose slightly in May; Trade flows weak
GDP growth in OECD area slowed to 0.3% in the first quarter of 2015
Only one quarter of workers worldwide have stable employment contracts
Automatic Exchange of Tax Information: OECD says countries won't be able to game system
Gates Foundation loses in Swiss family's shares coup
Minimum wage levels in OECD countries
Brent oil benchmark over $68 a barrel - up almost 50% in 2015
Global growth slows and manufacturing dips to 21-month low
Family-controlled firms dominate European business
Top 10 of world’s 250 largest consumer products companies account for 30% of sales
Nine of world's 20 fastest growing economies in Africa
Globalisation maybe stalling as trade growth remains weak
Global growth prospects uneven across major economies says IMF
Emerging markets growth lowest since 2009; Global growth at 30-year average
China's economic rebalancing hitting Latin American economies
New York, London, HK & Singapore top global financial centres index; Dublin recovers
Global growth in modest expansion from low oil prices/ monetary easing says OECD
Composite leading indicators point to positive change in growth momentum in the Eurozone
Global labour market trends portend paradise for some but uncertainty for many workers
Vienna remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich and Geneva overtake Singapore to become world's most expensive cities
HSBC Switzerland and Falciani: How it happened
Global economic power to continue shift from advanced economies
Global food price index falls in January; Cereal output set for record
Global debt has risen $57tn or 17% of world GDP since 2007